“Yeah I get my check on the 3rd, but can we have it come out on the 5th of the month? I just want to make sure the money is there.”
If you have sold Final Expense for any length of time, you have definitely heard this lie before. Yes, you heard me right. I said LIE! Because that is what this is. You have to realize something about our Final Expense prospects: they did not get to where they are today by making sound financial decisions.
What they are really saying is this: “I want to spend my whole check on whatever I want and IF I have money left over, I will pay my insurance bill.”
Don’t fall for this trap. Have you ever noticed that you have a lot more Insufficient Funds on the months when the 1st/3rd falls on a weekend? Here’s what happens: because their Social Security Billing Date falls on a weekend, the government sends them their money early. They get it around 1:00AM on Friday. Then the carriers send the charge to the bank on Monday, sometimes Tuesday. This gives the client almost 5 days to empty their checking account before the charge goes through.
Now there’s no money in the account and you get an NSF notification from the carrier. You get a chargeback and now you’re trying to get the client to pay for 2 months worth of premium when they don’t even have enough money for one.
So how can you prevent this? Use Social Security Billing Dates ONLY! Social Security and Disability checks only come in on the 1st, the 3rd or the 2nd/3rd/4th Wednesday. It’s determined based on their birthdays and what benefits they are receiving. Those should be the ONLY options you give the client. DO NOT LET THEM CHOOSE THEIR BILLING DATE!
Early on in your presentation, you should be determining if they have a way to pay. I like to do it as part of my health questions. “Any Diabetes, heart problems, history of strokes, COPD etc? Are you receiving any Social Security or Disability check from the government?” If you ask it like it’s just part of the routine, they won’t think anything of it. When they tell you they are receiving Social Security, follow up with this: “Oh yeah, so when do you get your check (smile), the 1st the 3rd or one of the Wednesdays?” Now you know the answer.
When you get to the close, you’re going to assume the sale and start filling out the application. “Now you said your daughter Rachael was to be your beneficiary, right? And you live at 123 Right Street? And you get your Social Security on the 3rd, correct? Ok great! Great thing is I don’t need any money, like I told you. They will actually send the bill straight to your bank on the 3rd. You won’t have to do anything. And don’t worry, they’ll never take it out early. And your birthday is 5/5/55 right?”
Just keep moving on. If you don’t make it a big deal, it won’t be a big deal. If you hesitate or look at them worriedly, they will worry and you will cause yourself to lose sales. If you disregard this, you will see much a much higher chargback percentage.
If the client comes back, I will just tell them that it HAS to come out on the day they receive their check. From my point of view, it IS MANDATORY. All of my agents are directed by me to do it. If it helps you, I’m telling you that it is mandatory as well. Remember, these folks have not gotten to 65 without having their Final Expenses taken care of because of sound financial planning. We have to help them. Sometimes we have to help them despite themselves. They need these policies. Their kids need these policies. We are doing them a disservice by allowing them to pick the 5th when they get their check on the 3rd.
Now you will still run into a problem when the 1st or 3rd falls on a weekend. Remember, they get their money on the Friday before if their Social Security billing date falls on a weekend. So you will always see more NSFs on those months. As you can see from the 2018 Calendar, the 1st or the 3rd falls on a weekend 7 months out of the year. So this is a big BIG deal.
So how can you avoid this? Some Final Expense companies actually understand this issue. While most companies will allow you to pick Social Security billing dates, they don’t do true Social Security billing.
Two companies that do it right are Transamerica and American Amicable. Both of these companies offer true Social Security Billing. What does that mean? It means that when the 1st/3rd falls on the weekend and the clients get their money on Friday, these carriers will go in on Friday and pull the money out at 2:00AM. That is AWESOME! No more NSFs. Well, how about just a lot less NSFs?
Hopefully one day all Final Expense carriers will do true Social Security Billing. Until then, you can lead off with carriers that do it right or, at the very least, make sure you only choose the 1st/3rd or 2nd/3rd/4th Wednesday.
Josh Jones is an expert in the Final Expense market. He and his business partner, Brandon Smotherman, who is a $400,000/year Final Expense Producer, have taken their years of successful experience in the Final Expense and Medicare markets and are now teaching agents how to replicate their proven system. So whether you are thinking about entering the Final Expense market or you are a veteran agent that desires a greater income or you just want to add some Final Expense products to cross sell, Josh and Brandon have the knowledge and resources to help you grow your business.
Visit https://FinalExpenseEntourage.com for more details.